For the whole of 2020, private home prices rose 2.2%, down from the 2.7% increase registered in 2019.
Singapore saw private home prices increase for a third consecutive quarter by 2.1% quarter-on-quarter during the fourth quarter of 2020 – the steepest quarterly increase in over two years.
For the whole of 2020, private home prices rose 2.2%, down from the 2.7% increase registered in 2019.
Last quarter’s price hike was mainly driven by non-landed properties within the Rest of Central Region (RCR) as well as the Core Central Region (CCR), which saw prices increase 4.4% and 3.2% quarter-on-quarter. Non-landed property prices in the Outside of Central Region (OCR) climbed 1.8% quarter-on-quarter.
“The growth in prices is testament to strong underlying demand and ample liquidity in the private residential market,” said Wong Xian Yang, Associate Director of Research for Singapore and Southeast Asia at Cushman & Wakefield.
Lee Sze Teck, Director of Research at Huttons Asia, noted that the mild increase in prices shows that the government policies “are still effective in curbing prices and ensuring a stable market”.
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Meanwhile, private home demand in Singapore was “surprisingly vibrant last year amid lockdowns and strict travel restrictions”, said Christine Sun, Senior Vice President of Research and Analytics at OrangeTee & Tie.
Urban Redevelopment Authority (URA) data showed that a total of 20,909 private homes, excluding executive condominiums (ECs), were sold in 2020, up 9.2% from 2019’s 19,150 units.
New home sales inched up by 0.7% to 9,982 units in 2020 from the 9,912 units shifted in 2019. For Q4 2020, new home sales stood at 2,603 units, down from the 3,791 units sold in the previous quarter.
Sun added that the COVID-19 pandemic “seemed to have reversed a decade of rampant growth in the rental market”.
Private home rentals slipped 0.6% for the whole of 2020, while increasing by just 0.1% in Q4 2020.
Occupancy rates for private homes, excluding ECs, dropped to 93% in Q4 2020 from the previous quarter’s 93.8%.
Nonetheless, Sun noted some bright spots recently.
“There seems to be more rental demand from overseas Singaporeans, PRs, and long-term pass holders who have returned to Singapore in recent weeks. They require a temporary place to stay while scouting for more permanent accommodation,” she said.
“There are also more overseas students looking for rental units now. Some locals who have just sold their private homes or flats have also rented in the interim as they wait for the completion of their new place.”
Looking ahead, Sun expects private home demand to remain resilient this year.
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“Buyer sentiment is likely to improve further as global growth is expected to accelerate this year, underpinned by a gradual return to normality with the virus vaccines and wave of liquidity,” she said.
With this, she expects “overall home prices to rise further by 1 to 4% in 2021 and new home prices may increase up to 5%”.
Wong, on the hand, sees private home prices continuing “to grow by up to 5% year-on-year in 2021, barring the implementation of new cooling measures”.
“It is still too early to call if cooling measures should be implemented at this stage as we have only seen a single quarter of strong growth,” he said.
“Nonetheless, we see heightened risks of additional cooling measures being implemented if prices continue to grow at this rate (>2% per quarter) for another one or two quarters, the authorities may step in.”
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